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Supply Chain Gifts of 2018

Everybody loves numbers. Not necessarily numbers in the arithmetic, trigonometric or algebraic sense. Rather, the simple use of numbers in headlines is apparently an effective trigger to draw readers into perusing content organized numerically. And content that might be useful as well.

So, in the spirit of songs such as The 12 days of Christmas and The 8 Days of Hanukkah, we’d like to share what we believe will be among the best supply chain practices and considerations for 2018.  While we have no intention in sharing it in musical format, we’ll simply refer to it as 5 Supply Chain Gifts for 2018 – in no particular order.

  1. Cybersecurity – Considering the volumes of data shared and transmitted among suppliers, business partners and other third parties, data breaches are a risk if all engaged parties are not maintaining standards of security compliance. As the Digital Guardian suggests, “The supply chain as a whole is only truly secure when all entities throughout the supply chain carry out effective, coordinated security measures to ensure the integrity of supply chain data, the safety of goods, and the security of the global economy.”
  1. Blockchain – On the topic of security, block chain is the incorruptible digital ledger used to accurately and securely record transactions among participants. This technology gained familiarity and recognition as the platform that records cryptocurrency transactions, but has subsequently seen additional use to prevent voter fraud and improve government efficiency. IBM has implemented blockchain in their supply chain network and has yielded results such as improved inventory management, fraud reduction and elimination, and increased customer/partner trust.
  1. Artificial Intelligence – Intelligent machines learning and adapting from human experiences and other interactions.  Earlier this year the Wall Street Journal published a piece declaring, “Artificial intelligence is shaping up as the next industrial revolution.” AI is the force behind voice-powered personal assistants, virtual reality, military mission management and more. American Express purports AI has a role in Global Supply Chain Management Planning. It can leverage information from sources as varied as historical data, social media and weather forecasts and, “AI-based machine learns to automatically analyze vast amounts of supply-chain management data, identify trends, and generate predictive analytics — the ability to predict problems and outcomes.” A supply chain manager’s dream.
  1. Data Analytics – No longer in its infancy, data analytics has long been an imperative for organizations ranging from baseball teams to chess leagues. Used for years in SCM, it is constantly evolving. Just ask IBM. By parsing out the types of analytics, e.g., predictive and prescriptive, and their respective usefulness, e.g., what might happen and what shall we do about it, IBM demonstrates how big data can be used to answer the toughest business questions. More here on their other types of analytics.
  2. People – Talented, skilled and dedicated resources are the foundation and support of innumerable organizations. Whether executing day-to-day processes or applying innovative applications to emerging technologies, people provide the vision and creativity to run a well-oiled, high functioning organization.

    The human component, for 2018, just might be your most important business asset.

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Mobile App Dependency

Imagine a world in which trauma is incurred due to the failure of an app.  Perhaps it is not so hard to envision should an incorrect medical diagnosis, due to faulty IT systems and data, result in personal harm.

But, suppose the distress is suffered due to faulty pizza delivery information transmitted by a vendor’s app?

While this may seem like an exaggeration, in truth, Domino’s pizza recently received negative press when consumers realized the accuracy of their transmitted pizza creation and delivery process was in serious question. When recounting errors in Domino’s mobile app, one user indicated “The first traumatic experience I had with the app was over the summer,” when her pizza was delivered late.

Individuals and businesses have come to rely so heavily on the performance of their apps and online tools that it is understandable when a user believes “If you’ve taken the time to create this technology to try and be engaged with your customer, can you do it correctly at least?”

Precisely.

Arguably, computer technology has been foundational infrastructure for businesses since the introduction of the IBM 701 in the early 1950s. Plenty of tabulators, calculators and the UNIVAC had been in use, but the 701 was among the first widely used and fully electronic data processing systems. Progress in information technology has been rapid since then, and especially exponential in the last few years.

The accompanying graphic from CA technologies, which depicts The History of IT Infrastructure since the advent of the 701, was presented to both illustrate the evolution of the systems and tools on which businesses have grown dependent, as well as question what technology components businesses are missing. Since this graphic’s publication in 2015 new technologies have surfaced that prove enormously useful, if not dispensable, to enterprises looking to retain and expand their businesses – without digital mishaps.

IT history a

The current explosion in the usage of mobile devices and the accompanying personal and business applications have left few 21st century employees and users experiencing the luxury of a disconnected lifestyle. Further evolution of IT systems has placed ample mobile apps in our hands for access 24/7.  The cryptocurrency bitcoin alone has a host of apps for your Bitcoin Wallet.

As we near the end of 2017, what are the major mobile applications for small businesses and enterprises? Here are just a few for various devices…

For remote business collaboration Business News Daily likes Slack for its ease in implementing audio, text and video as shared communications tools. For simplified file synching their recommendation is Dropbox which provides an easily manageable productive and connected environment. Similar to, but not as powerful as Microsoft Office, Google’s G Suite offers businesses and individuals free (to a point) access to spreadsheet, document and email creation.  Calendar and cloud function is accessible there as well.

Weighing in on mobile apps specifically designed for business use is PC Magazine who recently compiled a useful list of twenty applications that will enhance mobile functionality. NetSuite tops the list for “one-stop shopping” for ERP, finance and CRM processes. For those that need to collaborate digitally at a moment’s notice, ClickMeeting is recommended for video conferencing, screen sharing and streaming. To help track and respond to sales leads while on the road, PC Magazine HubSpot which is available for iOS and Android devices.

Smaller businesses might consider a visit to Nerdwallet where they have neatly organized their top app choices by business function, such as communication, time management and finance.

At SDI, we recognize how critical innovative technology is to a business. The many services we offer are underpinned by a robust suite of technology solutions ready to meet your needs. Let us help.


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Baseball and Procurement: More in Common Than You Think

“Tis the season.  Post-season play continues for Major League (MLB) baseball as the final two teams have advanced and begun play in the World Series, the annual championship round of games endearingly referred to as the Fall Classic.

While MLB doesn’t boast a lengthy history comparable to that of procurement process execution (1869 vs. almost forever) they nonetheless share several essential process components.  Three that readily come to mind are sourcing, data analytics and risk management.   In fact, last year’s MLB Diversity Business Summit – the premier sports employment conference and supplier diversity trade fair- provided a wide range of

procurement ops mlb

procurement opportunities, not including the actual sourcing of their “core” commodity:  the major league players themselves.

Procuring core commodities is critical to any business. High quality baseball players are absolutely essential for competitive advantage, especially during the Fall Classic.

Baseball’s sources of supply

According to a recent piece in The Wall Street Journal, “The overwhelming majority of major-league players come from one of two distinct pipelines. One is in Latin America, where an ingrained baseball culture coupled with rich signing bonuses serve as a magnet. The other is the American travel baseball circuit, in which parents pay thousands of dollars for children—nearly all of them white—to play year-round schedules in pursuit of a scholarship.”

Imagine the number of “procurement scouts”  required to cover two continents.

Once the teams are staffed, with 25 to 40 men on the roster, it is time to play, and perform, well. As in procurement, data analytics enters into play. The greatest example of leveraging data, and addressed in one of our earlier blogs, was outlined in Michael Lewis’s 2003 business best seller, Moneyball: The Art of Winning an Unfair Game. He recounts how the manager of one of baseball’s infamous underdog teams, the Oakland Athletics, leveraged baseball statistics and data to determine player recruitment. By simply shifting reliance from a player’s hitting record to their on-base percentage, the game was transformed forever.

Increasingly, data analytics are crucial to every day play.  According to a July copy of BizTech magazine, “Every major league team has developed an analytics department over the past several years, but some more than others are pushing the envelope in using the technology.

arthurlindbergh-foanalytics-2

The accompanying graphic illustrates the escalating use of analytics in MLB over the last few years…and the premium teams are willing to pay for “statheads.”

Similarly, innovative analysis of sourcing, spending data and supplier info – when collected and analyzed – gives an organization a competitive edge.

 

Yet, risk remains.

There is a fine balance between taking too much or not enough risk. Insufficient willingness to take risk in prospects may leave a team in short supply of future star players.  Conversely, taking excess risk may deliver an inflated team payroll yielding disappointing results.  Data analytics have proven to mitigate this risk.

Likewise, in contractor services procurement. Tracking and measuring a contractor’s performance and skill set, coupled with an executable feedback loop, provides an organization with a decision-making process. Will the tardy contractor be hired for future engagements? Will the error prone fielder be signed to a new contract?

If cutting-edge technology and innovative business processes are not part of your procurement organization SDI can help. SDI is uniquely positioned to bring process improvements that will enable your business to go further than it has gone before.


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Very Real Supply Chain Risk

Harvey, Irma and Maria.  These are seemingly innocent names and quite likely the given name of friends and family of countless people over hundreds of years.

Enter hurricane season 2017 and these appellations take on a new meaning. As the Atlantic hurricane season enters its second half  the effects of the aforementioned storms have generated a stunningly large volume of damage. And the season has two months remaining.  The loss of business and personal property, sizeable economic impact and most significantly, lack of swift recovery efforts are likely immeasurable.

Although the National Oceanic and Atmospheric Administration (NOAA), the United States science-based federal agency, purports that it might be too early to definitely blame gas-house emissions and global warming on the uptick of devastating hurricane activity, they do note that human activities may have already caused changes that are not yet detectable.NOAA additionally indicates increased global warming might cause more intense and destructive potential per storm.

Various supply chain service sectors have been considerably disrupted and, unfortunately, among the most notable are those crucial to recovery efforts such as pharma (drug shortages due to factory destruction in Puerto Rico, for example) and transportation (damage to rail tracks, runways and roads). Yet, human and environmental factors are but two areas influencing efficient supply chain operation.

The optimal preparation to rapidly react to these and countless other unanticipated circumstances is risk mitigation or risk management, with risk defined as the “probability of occurrence x consequences.” The Supply Chain Risk Leadership Council (SCRM), a collaborative council that shares risk best practices, defines supply chain risk management as “the coordination of activities to direct and control an enterprise’s end-to-end supply chain with regard to supply-chain risks.”

Data from previous disasters such as Katrina have contributed to existing supply chain risk mitigation knowledge but there is much more to be learned about the response and recovery efforts from the recent spate of storms.  While the most capable of supply chain professionals have integrated risk management into their process portfolio, global environmental and political risks, in particular, act as clear reminders to strengthen risk management and supply chain disruption strategies.

What are the factors requiring risk mitigation and management

The accompanying graphic from logistics blogger Emilin Jimenez  supply_chain_riskscrisply illustrates the

 

 

numerous factors to be considered when crafting a risk mitigation strategy.

Armed with the right data, information and strategy, supply chain professionals are positioned to execute SC processes with speed, agility and high performance. As United States founding father Ben Franklin stated, “By failing to prepare, you are preparing to fail.”

Our thoughts are with and will continue to remain with those affected by the recent devastating events.


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Is Procurement Child’s Play?

Procurement is hardly child’s play, considering the numerous interconnected tasks required for efficient and effective execution.  Practitioners would enthusiastically argue that the procurement function has matured over the years – from scribbled orders on papyrus to a globally digital operation.  It has gradually morphed into a critical corporate function which profoundly impacts an enterprise’s bottom line.

The accompanying graphic, created by Bill Michels, CEO at Aripart Consulting, was presented during the Horizon 2014 Purchasing Conference. Michels, pointing out the changes over several decades said, “Over time, the procurement function has gone from being transaction-driven through a variety of stages until today, when the real focus of the department is around being driven by the business strategies of the organization.”

procurement evolution

Hardly child’s play.

Yet, wouldn’t it be interesting – and fun – to be able to explain procurement to a child, perhaps even using a universal business model with which they are likely to be familiar. For our purposes, we will parallel several current supply chain methodologies with the age-old street lemonade stand.

Procurement practices such as strategy development, inventory optimization, and demand forecasting are a few choice examples.

Strategy

Fairly simple to describe: a plan of action to achieve one’s goals. A business strategy might differ slightly.  Wikibooks would have you believe a business strategy to be, “formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives.” And profits.

Lemonade Stand Translation: Mom or Dad, please purchase the necessary quantities –at the right price –  of lemons, sugar and cups so that after I pay you back for your financial outlay of materials, I may keep what is left over (profits).

Inventory optimization

Too much inventory leads to lower profits, yet with insufficient inventory customer demands will fall short.  According to Wikipedia, “many organizations that utilized inventory optimization reduced inventory levels by up to 25 percent in one year and enjoyed a discounted cash flow above 50 percent in less than two years.”

Lemonade Stand Translation: Dixie cups (or a reliable –let’s not forget quality– competitor) are a must have to sell lemonade.  Help Mom or Dad understand that unit pricing might be best at buying 100 while understanding that damage may occur with storage.  Sourcing the cups from a discount supermarket rather than the local gourmet shop might enhance the bottom line. Purchasing a small amount of cups, initially, will lead to less waste.  But, good inventory management starts with good …

Demand Forecasting

The term demand forecasting is fairly self-explanatory; what do you predict the estimated sales will be for your product. Most companies use historical data as input for their determination.

Lemonade Stand Translation: What does the weather look like?  If this isn’t the first lemonade stand of our young proprietors they have probably learned that July is hotter than September; a great help in determining when and how many ingredients to purchase.  Of course, allowing sufficient purchasing lead time with mom or dad is necessary to meet the demand of customers.

What about the competition down the street?  Perhaps some benchmarking is on order.  Where did they ever get those cute cups?

The list is endless.

The message here isn’t that Procurement is easy.  It might be easy to explain, but its innate complexities render it an important function of the corporation. And if procurement isn’t your core competency, consider outsourcing it.

We are here to help.


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What a coup!

A procurement coup, that is. A coup, and not of the military sort, “is an instance of successfully achieving something difficult,” according to Oxford Dictionary. Or, according to Merriam-Webster, “a brilliant, sudden, and usually highly successful stroke or act.”

Historically, there are countless coups of note. And arguably, many of the most remarkably valuable of these may be referred to as procurement coups.

The Louisiana Purchase comes to mind.

In 1803, sitting United States president Thomas Jefferson acquired an enormous swath of land, over 800,000 square miles, from the French for a mere $11M dollars.  Initially, Jefferson was opposed to the idea of such an expansive acquisition fearing it was both an unconstitutional maneuver and a potentially unfair expansion of the federal government’s power. Ultimately, Jefferson came around and the resulting land purchase nearly doubled the size of the United States.

The French were not the only ones who sat at the negotiation table with the U.S. Over a half a century after the Louisiana Purchase, in 1867, U.S. Secretary of State William H. Seward signed an agreement with Czarist Russia after the U.S. Senate approved the treaty of purchase. Apparently, the Russians lacked sufficient financial resources to adequately maintain military and civilian presence in such a sprawling region.   Eventually dubbed Seward’s Folly due its cost and the abundance of frozen wilderness to be procured in the $7M deal, it expanded the land holdings by 586,412 square miles which is roughly twice the size of Texas. The eventual discovery of gold, oil and other natural resources provided abundant prosperity for many.

Brilliant procurement purchases are not strictly limited to large land acquisitions. The recent –and rather unexpected- $13 billion purchase of organic food provider, Whole Foods, by giant online retailer, Amazon, not only shocked the global investment community but will redefine the grocery shopping experience. As the New York Times succinctly noted, “this will instantly transform the company that pioneered online shopping into a merchant with physical outposts in hundreds of neighborhoods across the country.”

The above-mentioned procurement examples simply represent a handful of purchasing achievements. The procurement function can be remarkably transformative for any organization… or government. Admirable negotiation skills, strategic direction and sound execution underpin the procurement process.  It is not merely about achieving the lowest price. It includes developing stable partnerships with trusted suppliers, preparing for disruptions through risk mitigation and understanding customer requirements. The effective procurement function provides a gateway to profits.

At SDI, we recognize the value of identifying which business processes are candidates for outsourcing.  And with 25 years of experience delivering procurement solutions for global customers, we are ready to maximize your bottom line results.


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I See You

This phrase may sound dreadfully creepy, depending on the context in which it used. Imagine someone hovering over your shoulder as you diligently work or innocently play on your device of choice. As they linger nearby they are eagerly scribing notes on the content of your text messages, emails written, photos taken and websites visited. None of us would stand for it.

Yet, we do and we know we do. Digitally.

Unless you’re streaming live video of yourself through a webcam or smart video device your physical self remains unseen. Yet, the digital footprint left behind by simply hovering with a mouse or swiping through a touchscreen retains sufficient hidden data to paint a fairly accurate portrait of who you are and what you like.

The accompanying infographic  from the digital literacy library of La Salle Academy in Providence, RI visually illustrates various components that drive the digital footprint.

footprint

Feel like making that footprint accessible to hackers? By not updating security software, using weak passwords, and retaining inadequate privacy settings on websites and apps, users are left vulnerable to unwanted access.

It is no surprise that Facebook, Amazon and other sites mine this data to provide us “branded” individuals with customized marketing campaigns and content. But what about those who’d like to opt out?

Major technology players have taken action to reduce this privacy invasion. Google, who had habitually been scanning users’ emails in an effort to glean information allowing them to cleverly target ad content, has recently announced an end to that practice. However, according to Business Insider “Instead of scanning a user’s e-mail, the ads will now be targeted with other personal information Google already pulls from sources such as search and YouTube.”  Rest assured you will still be the recipient of customized, targeted content.

Firefox, the free and open-source browser developed the non-profit Mozilla Foundation, has a fairly new sibling in town… Firefox focus.  This browser not only blocks ads but also provides tracking protection for Apple and Android devices. Users must keep in mind that Focus is a minimalistic browser that offers limited configuration.  Additionally, it uses Yahoo as its default search engine which might prove unappealing for many users.

Facebook has data privacy issues as well but they have larger issues to contend with, such as fake news, hateful posts and terrorist propaganda. Several weeks ago Elliot Schrage, Vice President for Public Policy and Communications for Facebook posted a series of “hard questions” as a means of opening a dialog on controversial issues, including privacy. Users are welcome to pose additional questions to Facebook at hardquestions@fb.com.

In the meantime, if the technology giants are not meeting your digital privacy needs Stay Safe Online is an organization whose mission is to empower a safer digital world. They offer plenty of tips and resources on how to stay safe online and minimize data intrusions.